The math to support the headline is simple. Ford sold about 12,000 electric vehicles (EVs) in the first quarter of the year. Ford’s EV unit, which it calls Model e, lost $700 million. Ford has and will invest billions of dollars in technology and plants so that EV production can expand quickly.

Ford cannot support rapid sales of its Mustang Mach-E, the third best-selling EV in America after two Tesla models, with expanded capacity. Ford believes it can sell 150,000 of its EV flagship F-150 Lightning models annually. This assumes that Lightning’s sales reach about a third of the annual sales of gasoline-powered F-150 trucks.

Every large company in the world loses tens of thousands of dollars, or more, on its EV production and sales. That figure may be much higher for some manufacturers in the earliest stages of EV sales.

The open question is what the annual loss per vehicle will be as EV sales grow for Ford and other legacy car companies. Market leader Tesla makes money on its cars, even with aggressive price cuts. Much of Tesla’s production capacity is already in place, however.

EV adoption is at the core of P&L calculation. It will be affected by two things. The first is the actual cost to produce EVs when production reaches a much larger capacity. The other is whether people will buy EVs at all. Research from the Energy Policy Institute at the University of Chicago and the Associated Press-NORC Center for Public Affairs Research “found that 47% of U.S. adults say it’s not likely they would buy an EV as their next car.” The primary reason for this number is the low number of charging stations in America and how long it takes to charge an EV.

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